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  (Source: Tesla Motors)

Tesla Model S  (Source: Motor Trend)
Tesla and Toyota drop a bombshell

The electric automobile market is booming as more and more consumers are looking to go green and to reduce the emissions and the amount of fuel that they consume. There are a number of electric cars and hybrids on the market today with cars like the Prius and the Tesla Roadster.

California governor Arnold Schwarzenegger hinted earlier today that Toyota and Tesla had plans to produce vehicles together. Now, the cat is officially out of the bag.

Toyota is lending a hand to Tesla Motors in the development of future electric vehicles including the next generation Roadster and the upcoming Model S sedan. According to a joint press release, Toyota will help Tesla with the development of "electric vehicles, parts, and production system" and it will also offer engineering support.

The Japanese auto giant will be funneling a relatively paltry -- for Toyota -- $50 million into Tesla through the purchase of common stock. Tesla will also take over the NUMMI manufacturing plant in Fremont, CA that was to be shutdown after GM went bankrupt and Toyota was left without a partner to run the facility.

"I sensed the great potential of Tesla's technology and was impressed by its dedication to monozukuri [Toyota's approach to manufacturing]," said Toyota Motor Corporation President Akio Toyoda. "Through this partnership, by working together with a venture business such as Tesla, Toyota would like to learn from the challenging spirit, quick decision-making, and flexibility that Tesla has. Decades ago, Toyota was also born as a venture business. By partnering with Tesla, my hope is that all Toyota employees will recall that 'venture business spirit,' and take on the challenges of the future."

According to Tesla CEO Elon Musk -- and reported by Autoblog -- by keeping NUMMI open, 1,000 employees will be brought back into the fold to build new electric vehicles. Those 1,000 employees could pump out roughly 20,000 vehicles in the first year. However, the plant has the capacity to build up to 300,000 vehicles a year and can employ up to 10,000 workers.

"The Tesla Factory effectively leverages an ideal combination of hardcore Silicon Valley engineering talent, traditional automotive engineering talent and the proven Toyota production system," said Musk. "The new Tesla Factory will give us plenty of room to grow."

"We look forward to learning and benefiting from Toyota's legendary engineering, manufacturing, and production expertise," continued Musk.

Tesla couldn't have asked for a better partner in Toyota to develop electric vehicles. Toyota has a vast portfolio of hybrid vehicles and expertise in electric motors and battery design. The company also has very deep pockets and a wealth of knowledgeable engineers.

And this announcement also helps push Toyota's current woes concerning vehicle safety and recalls to the back burner.

With Toyota's backing, we can count on the Model S sedan being on track for its 2012 debut. The Model S will have a base price of $49,900 after a $7,500 federal tax credit, dash to 60 mph in around 5.5 seconds, and will have a driving range of roughly 300 miles.

Despite all the positive news surrounding this announcement, there is one big loser in all of this: the town of Downey, California. Tesla was all set to work on an assembly plant in the town until it was wooed away to the Fremont.

"To think of all the time and effort that has been needlessly wasted by Downey due to Tesla misleading us is unconscionable," said Downey Mayor Pro Tem Luis Marquez, according to The Downy Patriot. "The question must now be asked if Tesla plans to reimburse all the costs associated with their underhanded negotiation tactics."

"Mr. Musk gave me his word Tesla would be coming to Downey. Today I learned the same lesson several other cities have learned when dealing with Mr. Musk," complained Councilman Mario Guerra. "I learned just how disingenuous Tesla was in their dealing with Downey and I now have a new appreciation why the public is fed up with corporate America. To think, Downey had planned to sign the lease tomorrow."



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RE: Made in the USA
By Brandon Hill (blog) on 5/20/2010 10:30:21 PM , Rating: 2
I don't think that any of the Big 3 have $50 million laying around collecting dust. I mean, hell, Toyota paid off that $18 million fine to the U.S. government like it was nothin'


RE: Made in the USA
By Runiteshark on 5/20/2010 10:36:17 PM , Rating: 5
Ford does.


RE: Made in the USA
By Brandon Hill (blog) on 5/20/2010 10:43:01 PM , Rating: 3
Ford is too busy trying to pay down $34B in debt, and is forgoing issuing dividends because of it.


RE: Made in the USA
By quiksilvr on 5/20/2010 11:44:36 PM , Rating: 2
Okay, I'm going to ask the burning question.

If Ford is capable of making a 31 MPG 300 HP V6 engine, why in f*ck hell can't they make a 50 MPG 100 HP V4 engine and take on the hybrids? Mathematically and physically speaking, it is totally possible, especially considering that the Ford Mustang weighs over 3000 pounds.


RE: Made in the USA
By Flunk on 5/21/2010 12:10:13 AM , Rating: 2
Funny enough, they are working on that right now. Expect to see a Fiesta that beats 50MPG (current model is 40MPG) when they introduce the ecoboost version within 2 years.


RE: Made in the USA
By Anoxanmore on 5/21/2010 9:13:35 AM , Rating: 2
Ecoboost isn't electric though... ;)


RE: Made in the USA
By RjBass on 5/21/2010 10:53:33 AM , Rating: 3
I don't know that it needs to be if it is getting 50+ mpg. That would be awesome.


RE: Made in the USA
By Jaybus on 5/21/2010 12:47:39 PM , Rating: 2
No, but it will be half the cost. $25,000 worth of gasoline is a lot of miles at 50 MPG. At $5/gal, that's 250,000 miles, or the entire lifetime of the vehicle. Green is not an argument either when 50% of the electricity comes from coal.


RE: Made in the USA
By ender21 on 5/25/2010 6:01:35 PM , Rating: 2
And something like 95-99% of gasoline comes from oil. I'll take 50% from coal any day. That's quite a reduction. (Our electricity comes from solar & natural gas, which would mean 100% less than coal.)

Any regular old Internal Combustion Engine that can be made that gets better and better MPG like Ford's could then be made EVEN BETTER by throwing on a hybrid drivetrain. Then it's not 50MPG. It's 75. Either way, it's all good.


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